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“unexplained investment”

Cash Credits & Unexplained ItemsSection 69Section 695,821 judgments

The decision most relied on for unexplained investment is Sumati Dayal v. CIT (214 ITR 801), cited in 1,967 judgments on BharatTax.

Leading authorities on unexplained investment

Sumati Dayal v. CIT
214 ITR 801 · 1995 · Supreme Court
1,967
citing judgments

The Revenue is entitled to look behind the apparent form of a transaction to discover its true nature, applying the test of human probabilities and surrounding circumstances. If transactions defy logic or are unnatural, they can be treated as bogus, even if supported by some documentation, especially in cases of cash credits or unexplained investments.

K.P. Varghese v. ITO
131 ITR 597 · 1981 · Supreme Court
989
citing judgments

An addition to income cannot be made merely on the basis of a difference in valuation of assets or a Valuation Officer's report without establishing actual understatement of consideration or the source of unexplained funds through proper enquiry. The Assessing Officer must conduct proper enquiry and satisfy the conditions for making such additions.

Chuharmal v. CIT
172 ITR 250 · 1988 · Supreme Court
340
citing judgments

The expression 'income' under Section 69A of the Income-tax Act, 1961, has a wide meaning, encompassing anything that comes in or results in gain. Therefore, an assessee's unexplained investments, such as purchasing articles or depositing cash, can legitimately be inferred and deemed as income under this section.

CIT v. Kamdhenu Steel & Alloys Ltd.
361 ITR 220 · 2014 · High Court
328
citing judgments

When making an addition under section 68, the creditworthiness or financial strength of an investor contributing share capital or share application money can be proved by producing their bank statements showing sufficient balance for the investment. The Supreme Court dismissed the SLP against this decision.

CIT v. Dwarkadhish Investment (P) Ltd.
330 ITR 298 · 2011 · High Court
218
citing judgments

An assessee cannot be asked to explain the source of the source for cash credits, particularly share capital or share application money, once they have discharged the initial onus regarding the identity, genuineness of the transaction, and creditworthiness of the immediate investor.

CIT v. Jansampark Advertising & Marketing (P.) Ltd.
56 Taxmann.com 286 · 2015 · High Court
196
citing judgments

The Commissioner of Income-tax (Appeals) has an independent statutory obligation to conduct proper inquiries and verify facts, especially when the Assessing Officer has failed to do so. The CIT(A) must ensure effective inquiry is carried out before deleting additions or accepting additional evidence.

ITO v. Ch. Atchaiah
218 ITR 239 · 1996 · Supreme Court
149
citing judgments

Under the Income-tax Act, 1961, the Assessing Officer must tax any taxable income in the hands of the correct assessee to whom it truly belongs, having no option to assess it in any other person's hands.

CIT v. Stellar Investment Ltd.
192 ITR 287 · 1991 · High Court
146
citing judgments

Once the identity of the shareholders is established, no addition can be made in the hands of the assessee company under Section 68 for share capital or share application money, as it cannot be treated as undisclosed income.

Judgments citing unexplained investment

Deputy Commissioner of Income Tax, Central Circle, Panaji vs. M/S Mohit Ispat Ltd., Kundaim

Appeal of the Revenue is PARTLY ALLOWED in aforestated terms

ITA 9/PAN/2020[2016-17]Status: DisposedITAT Panaji13 Oct 2026AY 2016-17

Bench: Hon’Ble Shri Pavan Kumar Gadale & Shri G. D. Padmahshaliassessment Years: 2016-17 Dy. Commissioner Of Income Tax, Central Circle, Panaji, Goa. . . . . . . . Appellant V/S M/S Mohit Ispat Limited 339/340, Kundaim Industrial Estate, Goa-403115 Pan: Aaccm8154E . . . . . . . Respondent Represented Assessee By: Mr Shriniwas Naik & Narchiva Lotlikar [‘Ld. Ar’] Revenue By: Mr Naveen Kumar [‘Ld. Dr’] Date Of Conclusive Hearing : 04/02/2026 Date Of Pronouncement : 27/02/2026 Order Per G. D. Padmahshali; This Appeal Of The Revenue Instituted U/S 253(2) Of The Income-Tax Act, 1961 [‘The Act’] Challenges Order Dt. 04/10/2019 Passed U/S 250 Of The Act By The Commissioner Of Income Tax Appeals-2, Panaji Goa [‘Ld. Cit(A)’] Which In Turn Sprung From Order Of Assessment Dt. 30/12/2017 Passed U/S 143(3) Of The Act By Acit, Central Circle, Panaji Goa [‘Ld. Ao’] Anent To Assessment Year 2016-17.[‘Ay’]

For Appellant: Mr Shriniwas Naik & Narchiva Lotlikar [‘Ld. AR’]For Respondent: Mr Naveen Kumar [‘Ld. DR’]
Section 132Section 133ASection 139(1)Section 143(3)Section 246ASection 250Section 253Section 253(2)

Since the assessee had already declared additional income of ₹7,38,094/- in relation to aforestated findings, the net addition as ‘unexplained investment’ u/s 69 of the Act after giving credit therefore was restricted to ₹6,98,306/-. 5. In first appeal, the Ld. CIT(A) deleted the former addition ... ACIT Vs M/s Mohit Ispat Limited ITA No. 009/PAN/2020 AY: 2016-17 therefore the net addition of ₹27,27,314/- was made as ‘unexplained investment’ u/s 69 of the Act. 10. Further when physical inventory of finished goods was taken at Navelim Factory Premises and compared with that of books

Shashi Bala, Ballabgarh vs. ITO Ward 4(1)(1), Aligarh

In the result, assessee’s appeal is dismissed

ITA 426/AGR/2025[2016-17]Status: DisposedITAT Agra04 Aug 2026AY 2016-17

Bench: : Shri S. Rifaur Rahman & Shri Sunil Kumar Singhassessment Year: 2016-17

Section 115BSection 142(1)Section 144Section 147Section 148Section 250Section 251(1)(a)Section 69Section 69A

bank accounts of the assessee and, therefore, the remaining payment of Rs.2,97,00,000/- was added u/s. 69 of the Act as unexplained investment and was taxed u/s. 115BBE of the Act, vide 2 | P a g e assessment order dated 22.03.2022 passed u/s. 147 r.w.s

Narayan Bhagyachandra Khatri, Nagpur vs. A.C.I.T, Amravati Circle, Amravati

In the result, the ground of appeal raised by the assessee is partly

ITA 254/NAG/2025[AY 2017-18]Status: DisposedITAT Nagpur26 Mar 2026

Bench: Shri Pawan Singh& Shri Khettra Mohan Roy(Physical Hearing) Narayan Bhagyachandra Khatri Acit, Amravati Circle, Amravati Flat No. Sp-2/102, Streling Springdale Vs Aayakarbhavan, Near Dps School, Apartment, Raj Nagar, Nagpur, Saturna, Amravati, Maharashtra – 440013. Maharashtra – 440006. [Pan: Aaccg4441J] Appellant / Assessee Respondent / Revenue

Section 234ASection 234CSection 254(1)Section 69

case, the learned AO erred in rejecting the books of accounts and in making addition of Rs. 25,00,000/- on account of unexplained investments u/s 69 without considering the facts & submissions in proper perspective and on presumption & suspicion. The addition made by AO and confirmed by CIT (Appeals ... Baroda. Such act of assessee was unusual. On the basis of such observation, the AO disallowed Rs. 25,00,000/- by treating as unexplained investment under section 69 and tax the same under section 115BBE. 4. Aggrieved by the additions in the assessment order, the assessee filed appeal before

Rama Yadav vs. ACIT/DCIT

In the result appeal of the assessee is partly allowed

ITA 272/DDN/2025[2017-18]Status: DisposedITAT Dehradun25 Mar 2026AY 2017-18

Bench: SHRI YOGESH KUMAR U.S. (Judicial Member), SHRI MANISH AGARWAL (Accountant Member)

Section 143(3)Section 250

issue in Ground of appeal No.2 raised by the assessee is 5. with respect to the addition of INR 79,34,354/- made towards unexplained investment in acquisition of the immovable property. 6. Heard the contentions of both the parties at length and perused the material available on record

Chintanbhai Lavjibhai Dankhara, Surat vs. ITO, Surat

ITA 769/SRT/2025[2012-13]Status: DisposedITAT Surat23 Mar 2026AY 2012-13

Bench: Smt. Annapurna Gupta

For Appellant: Respondent byFor Respondent: Shri Ajay Uke, Sr. DR
Section 147Section 250Section 44Section 69

erred in law and on facts in invoking the provisions of Section 69 of the Income Tax Act, 1961, to make additions towards alleged unexplained investments, despite the fact that the assessee is not required to maintain books of account under the provisions of Section ... invocation of Section 69 is untenable in the absence of books of account, as the very foundation of unexplained investment under Section 69 presupposes a comparison with recorded entries in books. In the absence of such books, the addition made is arbitrary, lacks legal basis, and deserves to be deleted

Nand Singh, Jaipur vs. ITO Ward 7(2), Jaipur

In the result, appeal of the assessee is allowed

ITA 357/JPR/2025[2013-14]Status: DisposedITAT Jaipur23 Mar 2026AY 2013-14

Bench: Shri Sanjay Garg & Shri Ratnesh Nandan Sahay

For Appellant: Sh. Ramkishan Choudhary, CAFor Respondent: Sh. Gaurav Awasthi, JCIT
Section 131Section 143(2)Section 250Section 69Section 69A

producing high yield and could generate higher income as per government statistics. The Ld. CIT(A), however, sustained the additions made on account of ‘unexplained investment’ and estimating the trading profit. . Aggrieved by the order of Ld. CIT(A) the present appeal has been filed before this Tribunal. During

Bansiwala Iron & Steel Rolling Mill, Jaipur vs. DCIT Cir.-3 Jaipur, Jaipur

In the result, the appeal is allowed

ITA 1350/JPR/2025[2010-11]Status: DisposedITAT Jaipur23 Mar 2026AY 2010-11

Bench: Shri Sanjay Garg & Shri Ratnesh Nandan Sahay

For Appellant: Sh. Mahendra Gargieya, AdvFor Respondent: Sh. Gaurav Awasthi, JCIT
Section 143(2)Section 143(3)Section 147Section 148Section 234ASection 250Section 69Section 69ASection 69C

well as on the facts of the case in confirming the estimated addition made by Id. AO on account of alleged the unexplained investment in the initial unaccounted capital involved @50% of the suppressed sale (less the estimated addition of the gross profit), u/s 69/69C of the Act. The addition ... assessee both on legal issue as well as on the facts of the case and confirmed the additions made on the account of unexplained investment and unexplained sales. . Aggrieved by the order of the Ld. CIT(A) the present appeal has been preferred before this Tribunal. During the course

Deputy Commissioner of Income Tax, Delhi vs. M/S Vestige Marketing Private Limited, Delhi

ITA 7844/DEL/2025[2024-25]Status: DisposedITAT Delhi20 Mar 2026AY 2024-25

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Amit Goel andFor Respondent: Ms. Monika Singh, CIT-DR
Section 132Section 133(6)Section 143(3)Section 147Section 37Section 37(1)Section 69A

accounts etc. The pressure of search was built so much that | had to make this surrender _without having actual possession of the assets or unexplained investments or expenses incurred and hence there being no_such_ income _as_ undisclosed”. He claimed that the money seized already stood declared

Deputy Commissioner of Income Tax, Delhi vs. M/S Vestige Marketing Private Limited, Delhi

ITA 7843/DEL/2025[2023-24]Status: DisposedITAT Delhi20 Mar 2026AY 2023-24

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Amit Goel andFor Respondent: Ms. Monika Singh, CIT-DR
Section 132Section 133(6)Section 143(3)Section 147Section 201Section 37Section 37(1)Section 69A

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'F': NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI

Deputy Commissioner of Income Tax, Delhi vs. M/S Vestige Marketing Private Limited, Delhi

ITA 7842/DEL/2025[2022-23]Status: DisposedITAT Delhi20 Mar 2026AY 2022-23

Bench: Shri Before Shri Satbeer Singh Godarabefore Shri Before Shri Satbeer Singh Godarasatbeer Singh Godara & Satbeer Singh Godara & And & Shri Naveen Chandra Shri Naveen Chandra, , , Shri Naveen Chandra Shri Naveen Chandra

For Appellant: Shri Amit Goel and Shri Pranav Yadav, Advocate
Section 132Section 143(3)Section 147Section 37Section 37(1)Section 69A

pressure of search was built so much that I had to make this surrender without having actual possession of the assets or unexplained investments or expenses incurred and hence there being no such income as undisclosed”. He claimed that the money seized already stood declared as out of known sources

Deputy Commissioner of Income Tax, Delhi vs. M/S Vestige Marketing Private Limited, Delhi

ITA 7841/DEL/2025[2021-22]Status: DisposedITAT Delhi20 Mar 2026AY 2021-22

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

Section 132Section 133(6)Section 143(3)Section 147Section 37Section 37(1)Section 69A

pressure of search was built so much that I had to make this surrender without having actual possession of the assets or unexplained investments or expenses incurred and hence there being no such income as undisclosed”. He claimed that the money seized already stood declared as out of known sources

Deputy Commissioner of Income Tax, Delhi vs. M/S Vestige Marketing Private Limited, Delhi

ITA 7840/DEL/2025[2020-21]Status: DisposedITAT Delhi20 Mar 2026AY 2020-21

Bench: Shri Before Shri Satbeer Singh Godarabefore Shri Before Shri Satbeer Singh Godarasatbeer Singh Godara & Satbeer Singh Godara & And & Shri Naveen Chandra Shri Naveen Chandra, , , Shri Naveen Chandra Shri Naveen Chandra

For Appellant: Shri Amit Goel and Shri Pranav Yadav, Advocate
Section 132Section 143(3)Section 147Section 37Section 37(1)Section 69A

pressure of search was built so much that I had to make this surrender without having actual possession of the assets or unexplained investments or expenses incurred and hence there being no such income as undisclosed”. He claimed that the money seized already stood declared as out of known sources

Deputy Commissioner of Income Tax, Delhi vs. M/S Vestige Marketing Private Limited, Delhi

ITA 7839/DEL/2025[2019-20]Status: DisposedITAT Delhi20 Mar 2026AY 2019-20

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Amit Goel andFor Respondent: Ms. Monika Singh, CIT-DR
Section 132Section 133(6)Section 143(3)Section 147Section 37Section 37(1)Section 69A

accounts etc. The pressure of search was built so much that | had to make this surrender _without having actual possession of the assets or unexplained investments or expenses incurred and hence there being no_such_ income _as_ undisclosed”. He claimed that the money seized already stood declared

Deputy Commissioner of Income Tax, Delhi vs. M/S Vestige Marketing Private Limited, Delhi

ITA 7838/DEL/2025[2018-19]Status: DisposedITAT Delhi20 Mar 2026AY 2018-19

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

For Appellant: Shri Amit Goel andFor Respondent: Ms. Monika Singh, CIT-DR
Section 132Section 133(6)Section 143(3)Section 147Section 37Section 37(1)Section 69A

pressure of search was built so much that I had to make this surrender without having actual possession of the assets or unexplained investments or expenses incurred and hence there being no such income as undisclosed”. He claimed that the money seized already stood declared as out of known sources

School of Engiering and Applied Sciences, New Delhi vs. Income Tax Officer, Assessment Unit, Delhi

Appeal of the assessee is allowed for statistical purposes

ITA 7518/DEL/2025[2020-21]Status: DisposedITAT Delhi20 Mar 2026AY 2020-21

Bench: Shri Raj Kumar Chauhan, Hon’Ble & Shri Brajesh Kumar Singh, Hon’Ble

For Appellant: Shri Priyansh Jain, CAFor Respondent: Shri Ravi Kant Choudhary, Sr. DR
Section 11Section 12ASection 12A(1)(ab)Section 143(3)Section 250Section 69Section 69A

based on entries in Form 26AS. 6. That the learned Assessing Officer has erred in treating aggregate time deposits of 296,75,000 as unexplained investments u/s 69, without appreciating the source of funds, nature of deposits, and the explanations furnished by the appellant. 7. That the learned Assessing Officer

Vikas Agarwal, Bulandshahr vs. ACIT, Central Circle, Meerut

In the result, all the appeals of the assessee are allowed

ITA 6485/DEL/2025[2016-17]Status: DisposedITAT Delhi20 Mar 2026AY 2016-17

Bench: Ms. Madhumita Roy & Shri Amitabh Shukla, Accountnat Member

Section 153ASection 69

issue raised by the assessee is regarding the addition of Rs.22,50,000/- for AY 2016-17 made by the ld. AO on account unexplained investment by relying upon annexure-A1. 6. We have heard rival submissions in the light of material available on records. The ld. Counsel

Vikas Agarwal, Bulandshahr vs. ACIT, Central Circle, Meerut

In the result, all the appeals of the assessee are allowed

ITA 6484/DEL/2025[2015-16]Status: DisposedITAT Delhi20 Mar 2026AY 2015-16

Bench: Ms. Madhumita Roy & Shri Amitabh Shukla, Accountnat Member

Section 153ASection 69

issue raised by the assessee is regarding the addition of Rs.22,50,000/- for AY 2016-17 made by the ld. AO on account unexplained investment by relying upon annexure-A1. 6. We have heard rival submissions in the light of material available on records. The ld. Counsel

Vikas Agarwal, Bulandshahar vs. DCIT, Central Circle, Meerut

In the result, all the appeals of the assessee are allowed

ITA 6483/DEL/2025[2014-15]Status: DisposedITAT Delhi20 Mar 2026AY 2014-15

Bench: Ms. Madhumita Roy & Shri Amitabh Shukla, Accountnat Member

Section 153ASection 69

issue raised by the assessee is regarding the addition of Rs.22,50,000/- for AY 2016-17 made by the ld. AO on account unexplained investment by relying upon annexure-A1. 6. We have heard rival submissions in the light of material available on records. The ld. Counsel

Vestige Marketing Pvt Ltd, Delhi vs. DCIT Central Circle -05, Delhi

ITA 5521/DEL/2025[2024-25]Status: DisposedITAT Delhi20 Mar 2026AY 2024-25

Bench: Shri Before Shri Satbeer Singh Godarabefore Shri Before Shri Satbeer Singh Godarasatbeer Singh Godara & Satbeer Singh Godara & And & Shri Naveen Chandra Shri Naveen Chandra, , , Shri Naveen Chandra Shri Naveen Chandra

For Appellant: Shri Amit Goel and Shri Pranav Yadav, Advocate
Section 132Section 143(3)Section 147Section 37Section 37(1)Section 69A

pressure of search was built so much that I had to make this surrender without having actual possession of the assets or unexplained investments or expenses incurred and hence there being no such income as undisclosed”. He claimed that the money seized already stood declared as out of known sources

Vestige Marketing Pvt Ltd, Delhi vs. DCIT, Central Circle-05, Delhi

ITA 5520/DEL/2025[2023-24]Status: DisposedITAT Delhi20 Mar 2026AY 2023-24

Bench: Shri Satbeer Singh Godara & Shri Naveen Chandra

Section 132Section 133(6)Section 143(3)Section 147Section 37Section 37(1)Section 69A

pressure of search was built so much that I had to make this surrender without having actual possession of the assets or unexplained investments or expenses incurred and hence there being no such income as undisclosed”. He claimed that the money seized already stood declared as out of known sources